Choon Young Chung v. Nana Development Corporation
783 F.2d 1124, 1986 U.S. App. LEXIS 22423, 54 U.S.L.W. 2433 (1986)
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Rule of Law:
A single, isolated shipment of goods into a forum state, made as an accommodation for a buyer following an out-of-state sale, does not by itself constitute the purposeful availment required to establish the minimum contacts necessary for personal jurisdiction under the Due Process Clause.
Facts:
- Choon Young Chung, a Virginia resident, initiated contact by telephoning NANA Development Corp., an Alaska corporation, to purchase reindeer antlers.
- NANA agreed to sell the antlers but required Chung to take delivery in Nome, Alaska.
- Chung traveled to Alaska, met with NANA officials, and paid for 500 pounds of antlers in a transaction finalized in Alaska.
- At the time of Chung's departure from Alaska, NANA had only prepared 120 pounds of the 500-pound order.
- Because Chung could not wait for the remainder, NANA agreed to ship the outstanding 380 pounds of antlers to him in Virginia via a common carrier.
- The antlers shipped to Virginia thawed and spoiled during transit.
- NANA had never solicited business in Virginia and had no other dealings with the state apart from this single transaction.
Procedural Posture:
- Choon Young Chung sued NANA Development Corp. in the U.S. District Court for the Eastern District of Virginia (a federal trial court) for breach of contract.
- The district court denied NANA's motion to dismiss for lack of personal jurisdiction.
- Following a bench trial, the district court found NANA liable and awarded $8,207 in damages to Chung.
- NANA, as appellant, appealed the judgment to the U.S. Court of Appeals for the Fourth Circuit, challenging only the district court's finding of personal jurisdiction. Chung is the appellee.
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Issue:
Does an out-of-state defendant's single, unsolicited shipment of goods into Virginia, made for the buyer's convenience after an in-person sale in the defendant's home state, create sufficient minimum contacts to support personal jurisdiction consistent with the Due Process Clause?
Opinions:
Majority - Wilkinson, Circuit Judge
No. The exercise of personal jurisdiction over the defendant in Virginia violates the Fourteenth Amendment's Due Process Clause. For jurisdiction to be proper, a defendant must have purposefully availed itself of the privilege of conducting activities within the forum state, creating 'minimum contacts' such that it could reasonably anticipate being haled into court there. Here, NANA's only contact with Virginia was an 'isolated' and 'attenuated' single transaction initiated by the plaintiff, Chung. The shipment into Virginia was not a purposeful act by NANA to develop a market but rather an accommodation for the plaintiff's convenience after the sale was completed in Alaska. Citing Hanson v. Denckla, the court emphasized that the 'unilateral activity' of the plaintiff cannot satisfy the requirement of contact with the forum state, and jurisdiction cannot be based on 'random, isolated or fortuitous' circumstances.
Dissenting - Ervin, Circuit Judge
Yes. The contacts were sufficient to establish specific personal jurisdiction because the cause of action arose directly from those contacts. When NANA was unable to fulfill its initial delivery obligation in Alaska, it voluntarily entered into a new agreement to ship its product into Virginia. This was not a unilateral act by the plaintiff but a conscious and purposeful decision by NANA to direct its activity at a Virginia resident in Virginia. This single act created a 'substantial connection' with the forum, making it foreseeable that NANA could be haled into court there for a breach related to that shipment. By choosing to ship the goods instead of refunding the payment or requiring Chung to make other arrangements, NANA purposefully availed itself of the forum and should be subject to its jurisdiction.
Analysis:
This decision reinforces a strict interpretation of the 'purposeful availment' requirement for personal jurisdiction, particularly in cases involving isolated transactions. It clarifies that a defendant's mere accommodation to a plaintiff, even if it involves shipping goods into the forum state, does not constitute the deliberate, purposeful contact necessary to establish jurisdiction. The case serves as a key example of how courts distinguish between a defendant's active efforts to serve a market and a passive response to a plaintiff's unilateral actions, thereby protecting localized businesses from nationwide litigation based on fortuitous events. It highlights the principle that foreseeability of a product arriving in a state is insufficient; the defendant must be able to foresee litigation there based on its own deliberate conduct.
